IoT: More than just cool technology

I can’t remember the last time I read an article about the Internet of Things (IoT) that didn’t start with market projections about the phenomenal number of devices that will be enabled in the next five to 10 years, or the astonishing number of connections there will be globally. I think it is fair to say, at this point, that we all get that IoT is going to be pretty darn big.

So, I am going to forgo the sensational statistics, like GE’s estimate that the Industrial Internet – their name for IoT – could add $10 to $15 trillion to the global GDP over the next two decades (sorry, this one was too juicy to resist), and get straight to the point. And, in my opinion, the point is that it is time for the IoT discussion to move on from what’s technologically possible to making the business case for IoT, because without a strong dollars and cents-based value proposition, there won’t be any business to forecast.

IoT – Can it create upside demand?

At the core of the IoT business case is whether the ability to wirelessly connect devices via the Internet and have them automatically gather, analyze and distribute data is more than just a ‘nice feature’ to have. Can it create upside demand?

To answer that question, we must first determine of what value is an IoT-capable device to OEM customers in markets such as the industrial medical, Mil/Aero, smart home or automotive. A commonly used demonstration of this potential value is the soda vending machine. If that machine is Web-enabled, rather than having to expend both manpower and transportation resources to physically check stock in every machine, inventory information can be relayed to a central system that could trigger a replenishment order – all without any human intervention. There are obvious operational and cost efficiencies that can be gained here, as well as the customer service benefit of not losing a sale due to a machine stock out.

But, that’s not where the IoT ROI ends. Now, let’s say the unit owner could take the usage inputs from machines across the city, or state or even country, and use that data to derive trend information that could enable him to better position his inventory, assuring he always has adequate supply of the varieties that sell best in certain locations. More efficiencies, better customer satisfaction.

“In order to bring a differentiated IoT-enabled product to market on time and on budget, OEM engineers need access to the state of the art technology and the expertise to unlock the full performance capabilities of these technologies”

But wait, there’s more. Now, let’s take this connected machine’s capabilities to an even higher level. Here is a scenario I read about in a Cisco blog. What if a potential patron was a diabetic, and that machine could gather the individual’s medical history by connecting with the buyer’s cell phone. Further, if the machine has sensors built in, maybe it could then capture and analyze the patron’s breath to determine exactly what nutrients they need at that very moment, and make a drink recommendation based on the user’s unique requirements. That is one seriously differentiated customer service experience.

So, the business case for the owner of the vending machine is apparent. But, what about the OEM? Can the margin on the machine justify the investment required to engineer and produce it?

Obviously, this is highly dependent on many factors. In order to bring a differentiated IoT-enabled product to market on time and on budget, OEM engineers need access to the state of the art technology and the expertise to unlock the full performance capabilities of these technologies.

Incorporating wireless technology into their products and developing new solutions that can connect with and leverage the Internet brings an array of engineering challenges. These include the need for ultra-low power solutions, designing with the latest nanotechnology and the growing demand for software expertise to enable these devices to move and interpret data in order to create actionable responses.

For example, the ‘always on’ feature of many IoT devices complicates the power supply and thermal management design for engineers. The wireless sensors used in these devices to measure parameters such as temperature, pressure, acceleration or humidity will need to be able to operate at ultralow power for extended periods. Advancements in energy-harvesting wireless sensors and receivers will expand the transmission range of IoT devices, opening doors to as-yet unimagined applications.

To help design engineers learn how to efficiently manage the complexity of wireless product development, Avnet offers a broad portfolio of products and in-house technical expertise. These include live and on demand training workshops for designers of embedded applications, like our IoT Innovation Bootcamp; access to a team of supplier-trained FAEs, and an extensive collection of board solutions and reference designs featuring the latest technologies from top suppliers.

Avnet Electronics Marketing also recently opened two joint application design centers in conjunction with Microsemi Corporation, which will develop application-specific reference designs solving OEM customers’ major technical design challenges requiring low-power and security. Our Embedded Software Store provides developers across the globe with access to proven software solutions with competitive pricing, licensing terms, support, compatibility and interoperability. In addition, Avnet is currently planning a Design Strategies for the Internet of Things seminar series, modeled after our popular X-fest and Design Strategies for ARM Systems events. We intend to launch the series in 2015.

At Avnet, we believe that the business case for IoT for component makers, systems manufacturers and users is clear. IoT represents an exceptional opportunity for members of the electronics supply chain and we are committed to supporting customers in their efforts to create and deliver new and better products and services, making them more productive, more environmentally friendly, safer, better informed and ultimately more profitable.